Covid-19 puts hit on village room-tax revenue

The Village of Grafton’s room-tax revenue for the first quarter of 2020 was down nearly 28% from last year.

At this time in 2019, the village had received approximately $73,000 in room taxes, and it ended the year with $387,762. 

During Monday’s Finance Committee meeting, Finance Director Paul Styduhar said the village earned $52,604, or 27.9% less than last year, in room taxes for the first quarter of 2020. 

Numbers for the second quarter will not be available until the end of the month, but Styduhar said he expects the revenue will be half as much as last year’s second quarter collection of $107,860.

He said he also expected the third and fourth quarters to be 25% of last year’s combined total of $206,943 for that period.

Styduhar said the biggest impact of the revenue decrease will be on the Grafton Area Chamber of Commerce. State law requires municipalities that collect a local room tax to forward 70% of that revenue to a tourism entity, such as the Chamber, to improve tourism assets. 

The Chamber received about $51,000 for the first quarter of 2019. This year, it was given $36,823. 

“Bottom line, Covid-19 is everywhere,” Chamber Executive Director Pam King said.

“In January, we were in a fine place and things were status quo. Once Safer at Home hit, hotels were considered essential, but there was no business or tourism travel.”

During the shutdown, King said, some area health-care workers and first responders quarantined themselves in Grafton’s hotels to prevent spreading the coronavirus to family members.

“They weren’t huge numbers for the hotels, but those people were making that decision to protect their loved ones,” she said, noting hotels had about a 10% occupancy rate in February and March.

Since then, King said, business travel has picked up, but she doesn’t believe it will make up for the projected loss in room tax.

“Festivals are what our hotels rely on. Tourism has a huge impact on our room stays in the summer and early fall. The impact is going to be big,” she said. 

Prior to the pandemic, King said she was expecting a record year for the three Grafton hotels because of the Democratic National Convention in Milwaukee and the Ryder Cup in Haven. The Ryder Cup has been postponed until 2021, and the scope of the convention has been significantly reduced.

King said the amount of money the Chamber receives will cover its costs, but it will have to cut back on advertising.

“We are thankful for what we received in the first quarter because we were expecting it to be a lot worse. I have a feeling the second quarter will be more impactful,” King said.